In the new issue of Regulation, economist Pierre Lemieux argues that the recent oil price decline is at least partly the result of increased supply from the extraction of shale oil. The increased supply allows the economy to produce more goods, which benefits some people, if not all of them. Thus, contrary to some commentary in the press, cheaper oil prices cannot harm the economy as a whole.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Tag: cost containment

That didn’t take long at all. Left-wing congresscritters have (re-)introduced legislation to create a “public option” in ObamaCare’s health insurance exchanges.

The Congressional Budget Office scores the bill as reducing federal deficits by $53 billion by 2019. How? Paying doctors and hospitals less! Put that on a bumper sticker! The public option would use Medicare’s price and exchange controls to pay doctors and other health care providers 5 percent more than Medicare does. Except for prescription drugs: the public option would, ahem, “negotiate” those prices, meaning it would use a separate price-control scheme and pay less than Medicare does. (That means PhRMA probably won’t be bankrolling the public-option campaign the way it bankrolled the pro-ObamaCare campaign and is bankrolling the re-election bids of its congressional benefactors.) Providers, such as community hospitals, would take a huge pay cut if some of their privately-insured patients suddenly only paid Medicare plus 5 percent.

When costs explode under ObamaCare the way they are exploding under RomneyCare, expect the public option to be the Left’s go-to solution. In CongressDaily, co-sponsor Rep. Raul Grijalva (D-Ariz.) says:

By reintroducing it, we make sure that people don’t forget this is a viable option…. I think as the health bill is implemented, more and more people are going to come to the realization that cost containment and competition aren’t as robust as they should be, because of the absence of the public option.

Naturally. Because the first thing that comes to mind when I think cost-containment and competition is government health care programs.

The CBO report that said the health care bill won’t raise deficits makes it clear that the Baucus bill’s reduction in future budget deficits comes not from controlling government spending or reducing health care costs, but because of a rapid escalation in tax revenues.

The bill imposes a 40 percent excise tax on health-insurance plans that offer benefits in excess of $8,000 for an individual plan and $21,000 for a family plan. Insurers would almost certainly pass this tax on to consumers via higher premiums. As inflation pushes insurance premiums higher in coming years, more and more middle-class families would find themselves caught up in the tax.

In fact, overall, the tax increases in the bill are more than double the amount of deficit reduction. This isn’t a health care efficiency bill or a cost containment bill. It is a tax and spend bill, pure and simple.

From a patient’s point of view, the ideal health insurance policy would offer unlimited access to medical services at no charge. Unfortunately, it is not feasible to offer this to everyone.

The key to sustainable health care reform is restraining the use of services that have high costs and low benefits, says Cato adjunct scholar Arnold Kling. In the video below, Kling examines the challenges facing health reformers and the feasibility of alternative proposals.